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Isn’t this basically the innovator’s dilemma? You can call it focusing the core business, but you can also call it dropping investment in long term cash flows.

by rcme 3y ago

anonylizard 3y ago
That's not the innovator's dilemma. The dilemma is when you have tech A: Profitable and large. Tech B: Unprofitable and small, but the tech itself improves at a faster rate than tech A. GPUs were their true dilemma. GPUs were only good for gamers, who are picky and extremely value sensitive. Whereas CPUs could be sold to datacenters and enterprises, very high profit margins. Hence CPUs were core at intel, no one has the balls to bet on GPUs and go all in. But CPUs ran out of performance improvements, GPUs continue to scale up because of parallelism. Then suddenly, new valuable applications started to be based on GPUs, first Crypto, now AI. Now CPUs are completely commoditized, and Nvidia dominates the money-printing GPU market, and worth 8x of intel. NUCs are not some rapidly improving tech, they are just some minor market that is profitable but never that large.
- unixhero 3y ago
  > NUCs are not some rapidly improving tech, they are just some minor market that is profitable but never that large. Everything doesn't have to be
scarface_74 3y ago
The NUC was never going to be a mass market product. Sure Apple sells the Mac Mini. But the entire Mac line is only 10% of Apple’s revenue and most of that is laptops. But Apple has to support its ecosystem as its only supplier. Intel doesn’t And besides, a NUC based on x86 chips is by definition going to suck at either performance or heat.
- DaiPlusPlus 3y ago
  > Sure Apple sells the Mac Mini. But the entire Mac line is only 10% of Apple’s revenue and most of that is laptops The 10% figure is spot-on and that really threw me - I was expecting something like 25-30%: https://www.apple.com/newsroom/pdfs/FY22_Q4_Consolidated_Financial_Statements.pdf https://www.apple.com/newsroom/pdfs/FY22_Q4_Consolidated_Fin... It’s unnerving that Apple is effectively dependent on a single product line to subsidise everything: Apple Silicon must have cost tens (hundreds?) of billions of dollars to get to where the M2 chip is today (including acquisitions) - but it only exists today all because of the A-series SoC in the iPhone: without the iPhone Apple would likely be still dependent on Intel for Mac chips. The iPhone isn’t going away any time soon - but when/if that day comes, Apple is going to be faced with having to maintain all those iPhone-originated projects with no easy way to walk them down (e.g. switching from Apple Silicon back to Intel - or stock ARM - is going to damage Apple’s credibility for years). I’m concerned Apple might be painting themselves into a corner by continuing to shed businesses it isn’t interested in that might be a useful lifeline in a post-iPhone world, like their XServe hardware - or even their MacPro workstations: Apple has seemingly intentionally priced themselves out of reach of smaller and indie creative-types - while at the high-end (movies, etc) the great migration from FCP-on-Mac to Avid-on-Windows took place almost a decade ago - and the lack of PCI-Ex GPUs in the 2023 M2 MacPro is further evidence, to me at-least, that Apple is increasingly uninterested in the Workstation market - which leaves them with less access to trend-setting professionals - which erodes their ability to compete, long-term, imo. Intel killing-off the NUC is unfortunate, but ultimately is not Intel’s core business (chipmaking) which remains their priority. I don’t blame Intel for doing that; but it would be the same thing if Apple killed-off their Mac Studio line (they even look-alike): it isn’t their (current) core-business - but as Apple sheds - or neglects - its old core-businesses (i.e. computers) it leaves them with fewer contingency options.
  - scarface_74 3y ago
    > It’s unnerving that Apple is effectively dependent on a single product line to subsidise everything From 1977 - 1988 Apple was totally dependent on the Apple //e (the Mac was losing money) From 1992-2003 Apple was totally dependent on the Mac (the iPod was just a meaningful contributor to revenue when iTunes came to Windows.) When Apple depended on the Mac for revenue, they consistently failed to keep up with Intel - first with the 68K and then with the Mac. If the iPhone fails, the Mac no matter what would never keep up.
  - whynotminot 3y ago
    > Apple has seemingly intentionally priced themselves out of reach of smaller and indie creative-types I don't think this take makes any sense. Sure, you can spec out an insanely expensive Mac today. That's always been the case. But with Apple Silicon, there's actually never been a better price to performance ratio at the bottom end of their lineup, perhaps in Apple's entire history. An entry-level Mac Mini or MacBook Air can give an indie creator tremendous power and performance per dollar. I think you're right that Apple has lost a lot of creative professionals over the years who migrated to Windows, and the lack of plug and play GPUs may well keep some of those professionals away. But I think it's actually precisely the indies that represent Apple's best chance at making inroads into the space again over the long run. If you're a kid trying to bootstrap a new YouTube channel or experimenting with filmography and building a portfolio, it's hard to recommend a better combo than FCP and a Mac Mini for performance and cost.
    - nordsieck 3y ago
      > But with Apple Silicon, there's actually never been a better price to performance ratio at the bottom end of their lineup, perhaps in Apple's entire history. An entry-level Mac Mini or MacBook Air can give an indie creator tremendous power and performance per dollar. The frustrating thing is just how quickly value decays with Apple's pricing strategy. When it comes to the Mac Mini/Studio, outside of some extremely niche applications, it really only makes sense to get base models. It is infuriating how much Apple charges for additional ram.
- deleted 3y ago
  [deleted]
- jbergens 3y ago
  In a way it would be logical for Apple to get out of the computer business and scrap all MacBooks and Mac Minis. That they only have around 10% of the market means that most people uses iPhones with non-Apple computers anyway. They could focus on making that experience even better.

Isn’t this basically the innovator’s dilemma? You can call it focusing the core business, but you can also call it dropping investment in long term cash flows.

by rcme 3y ago

Isn’t this basically the innovator’s dilemma? You can call it focusing the core business, but you can also call it dropping investment in long term cash flows.

anonylizard 3y ago

That's not the innovator's dilemma. The dilemma is when you have tech A: Profitable and large. Tech B: Unprofitable and small, but the tech itself improves at a faster rate than tech A. GPUs were their true dilemma. GPUs were only good for gamers, who are picky and extremely value sensitive. Whereas CPUs could be sold to datacenters and enterprises, very high profit margins. Hence CPUs were core at intel, no one has the balls to bet on GPUs and go all in. But CPUs ran out of performance improvements, GPUs continue to scale up because of parallelism. Then suddenly, new valuable applications started to be based on GPUs, first Crypto, now AI. Now CPUs are completely commoditized, and Nvidia dominates the money-printing GPU market, and worth 8x of intel. NUCs are not some rapidly improving tech, they are just some minor market that is profitable but never that large.

unixhero 3y ago
> NUCs are not some rapidly improving tech, they are just some minor market that is profitable but never that large. Everything doesn't have to be

scarface_74 3y ago

The NUC was never going to be a mass market product. Sure Apple sells the Mac Mini. But the entire Mac line is only 10% of Apple’s revenue and most of that is laptops. But Apple has to support its ecosystem as its only supplier. Intel doesn’t And besides, a NUC based on x86 chips is by definition going to suck at either performance or heat.

DaiPlusPlus 3y ago
> Sure Apple sells the Mac Mini. But the entire Mac line is only 10% of Apple’s revenue and most of that is laptops The 10% figure is spot-on and that really threw me - I was expecting something like 25-30%: https://www.apple.com/newsroom/pdfs/FY22_Q4_Consolidated_Financial_Statements.pdf https://www.apple.com/newsroom/pdfs/FY22_Q4_Consolidated_Fin... It’s unnerving that Apple is effectively dependent on a single product line to subsidise everything: Apple Silicon must have cost tens (hundreds?) of billions of dollars to get to where the M2 chip is today (including acquisitions) - but it only exists today all because of the A-series SoC in the iPhone: without the iPhone Apple would likely be still dependent on Intel for Mac chips. The iPhone isn’t going away any time soon - but when/if that day comes, Apple is going to be faced with having to maintain all those iPhone-originated projects with no easy way to walk them down (e.g. switching from Apple Silicon back to Intel - or stock ARM - is going to damage Apple’s credibility for years). I’m concerned Apple might be painting themselves into a corner by continuing to shed businesses it isn’t interested in that might be a useful lifeline in a post-iPhone world, like their XServe hardware - or even their MacPro workstations: Apple has seemingly intentionally priced themselves out of reach of smaller and indie creative-types - while at the high-end (movies, etc) the great migration from FCP-on-Mac to Avid-on-Windows took place almost a decade ago - and the lack of PCI-Ex GPUs in the 2023 M2 MacPro is further evidence, to me at-least, that Apple is increasingly uninterested in the Workstation market - which leaves them with less access to trend-setting professionals - which erodes their ability to compete, long-term, imo. Intel killing-off the NUC is unfortunate, but ultimately is not Intel’s core business (chipmaking) which remains their priority. I don’t blame Intel for doing that; but it would be the same thing if Apple killed-off their Mac Studio line (they even look-alike): it isn’t their (current) core-business - but as Apple sheds - or neglects - its old core-businesses (i.e. computers) it leaves them with fewer contingency options.
- scarface_74 3y ago
  > It’s unnerving that Apple is effectively dependent on a single product line to subsidise everything From 1977 - 1988 Apple was totally dependent on the Apple //e (the Mac was losing money) From 1992-2003 Apple was totally dependent on the Mac (the iPod was just a meaningful contributor to revenue when iTunes came to Windows.) When Apple depended on the Mac for revenue, they consistently failed to keep up with Intel - first with the 68K and then with the Mac. If the iPhone fails, the Mac no matter what would never keep up.
- whynotminot 3y ago
  > Apple has seemingly intentionally priced themselves out of reach of smaller and indie creative-types I don't think this take makes any sense. Sure, you can spec out an insanely expensive Mac today. That's always been the case. But with Apple Silicon, there's actually never been a better price to performance ratio at the bottom end of their lineup, perhaps in Apple's entire history. An entry-level Mac Mini or MacBook Air can give an indie creator tremendous power and performance per dollar. I think you're right that Apple has lost a lot of creative professionals over the years who migrated to Windows, and the lack of plug and play GPUs may well keep some of those professionals away. But I think it's actually precisely the indies that represent Apple's best chance at making inroads into the space again over the long run. If you're a kid trying to bootstrap a new YouTube channel or experimenting with filmography and building a portfolio, it's hard to recommend a better combo than FCP and a Mac Mini for performance and cost.
  - nordsieck 3y ago
    > But with Apple Silicon, there's actually never been a better price to performance ratio at the bottom end of their lineup, perhaps in Apple's entire history. An entry-level Mac Mini or MacBook Air can give an indie creator tremendous power and performance per dollar. The frustrating thing is just how quickly value decays with Apple's pricing strategy. When it comes to the Mac Mini/Studio, outside of some extremely niche applications, it really only makes sense to get base models. It is infuriating how much Apple charges for additional ram.
deleted 3y ago
[deleted]
jbergens 3y ago
In a way it would be logical for Apple to get out of the computer business and scrap all MacBooks and Mac Minis. That they only have around 10% of the market means that most people uses iPhones with non-Apple computers anyway. They could focus on making that experience even better.